‘Difficult and painful’: LR Global alleges conspiracy by some former BSEC commissioners

LR Global had gone through a long episode of “adversities” due to a conspiracy by some former commissioners at Bangladesh Securities and Exchange Commission.

So says CEO Reaz Islam.   

The conspiracy to “damage” LR Global’s performance in Bangladesh had a “huge impact” on the local market, Islam said at a news conference in Dhaka on Saturday.

“They conspired against the most successful and professional company in the market for their own interests, obstructing the flow of foreign investments into the capital market.”

Islam shared his experiences while narrating the condition of the market and successes achieved by LR Global, one of the top fund managers in Bangladesh.

“One or two BSEC commissioners had made a hell of my life with accusations, 95 to 99 percent of which were false,” Islam said, describing an episode in the history of the company as “painful experiences” that started in 2015.

After making a foray into the market in 2010, LR Global made “progress” but the former BSEC officials’ activities made the company’s work “difficult and painful”, he said.

The former officials of BSEC stacked false allegations against LR Global and spread “made-up” stories, serving their own “selfish” interests, Islam said.

Reaz Islam, CEO of LR Global Bangladesh, speaks at a media briefing in Dhaka on Saturday.

Islam said the publication of “fake news” against LR Global breached BSEC rules and the Digital Security Act.

“Foreign investors lost interest in Bangladesh's market due to this behaviour towards one of the leading fund managers.”

M Khairul Hossain, a professor of finance at Dhaka University, presided over the BSEC as its chairman in the period Islam referred to, without naming him. Hossain returned to the university after the end of his tenure in May 2020.

Prof Md Helal Uddin Nizami of Chattogram University was one of the commissioners during Hossain’s tenure. Around 10 days before the end of Hossain’s term, Nizami left the BSEC.

Islam refused to disclose the names of the BSEC commissioners that “conspired” against LR Global.

bdnews24.com tried to contact Prof Hossain for his comments on the allegations brought by the LR Global CEO, but he did not respond.

Islam explained the timing and importance of the news briefing, saying LR Global wants to play a catalytic role in the Bangladesh economy and investments and the difficulties his organisation faced since 2015 have come to an end in early 2021.

At the press conference, LR Global pledged to resume its efforts to promote foreign direct investment in the country and vowed to provide full support to the new commission, so that its reforms have a “positive impact” on the capital market.

Prof Shibli Rubayat-Ul-Islam of Dhaka University’s banking and insurance department, took over as BSEC chairman in 2020.

“We are very much excited that the new commission has given us a chance. We are working with them. [The conspiracies] are behind us,” Reaz Islam said. “They [current commission] are finally trying to address the problems.”  

LR Global was a regular subject of reportage in the local media after it announced an investment of Tk 500 million in Bangladesh’s largest news publisher, bdnews24.com, in 2019. At the presser on Saturday, a reporter, citing the BSEC, asked if LR Global took a decision to withdraw the funds.

“Let me be clear – the investment we made is absolutely legal,” Islam said.

“Secondly, our past relationship [with the commission] had been adversarial, not constructive. Our job is to make investments and, in doing so, we can make mistakes. We want to solve the issue in a constructive way.”              

“Now we are working with the BSEC. We will solve the issue by creating a win-win situation following their instructions,” Islam said.

Reaz Islam, CEO of LR Global Bangladesh, speaks at a media briefing in Dhaka on Saturday.

SUCCESSES

LR Global is currently managing six mutual funds: DBH First Mutual Fund, Green Delta Mutual Fund, AIBL First Islamic Mutual Fund, MBL First Mutual Fund, LR Global Bangladesh and NCCBL Mutual Fund-1.

Islam said the company wants to create more mutual funds in future.

According to him, LR Global generated 32.4 percent cumulative profit in 2017, 17.5 percent in 2018, 19.4 percent in 2019 and 40.1 percent in 2020 -- the highest amount of profits among Bangladeshi fund managers in the past four years.     

Besides giving the investors “good” profits, he said, their investment in LR Global is “less risky”.  

The dividends given by LR Global to the investors so far are as follows:

DBH First Mutual Fund (listed in 2010): Tk 667.2 million, or 55.6 percent of the fund.

Green Delta Mutual Fund (listed in 2010): Tk 472.5 million, or 31.5 percent of the fund.

AIBL First Islamic Mutual Fund (listed in 2011): Tk 537.5 million, or 53.75 percent of the fund. 

MBL First Mutual Fund (listed in 2011): Tk 485 million, or 48.5 percent of the fund.  

LR Global Bangladesh (listed in 2011): Tk 1.25 million, or 41.68 percent of the fund.

NCCBL Mutual Fund-1 (listed in 2012): Tk 512.7 million, or 51.27 percent of the fund.